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Ad Age: Why So Many Media Companies Stumble GloballyThe few news brands that have succeeded, to greater or lesser degrees, arguably include CNN, Bloomberg, People, Thomson Reuters, The Wall Street Journal, The New York Times, The Financial Times and The Economist. Other contenders are the Associated Press, the BBC, ABC, NBC, maybe CBS, National Public Radio, News Corp. and the top U.K. dailies, said Ken Doctor, the newspaper veteran who's now an analyst at Outsell. "If a news-media organization sees itself as covering the wider world, sees it as its foundation, that in and of itself differentiates it from all the local media -- newspapers, TV, radio -- out there," he said. "If, in addition, it has substantial reporting and editing resources, then it can play. The tough part is the part we're in: Who wins the race to ubiquity and can make it pay off?"

NYT: If The Globe Were Sold, What Price? “The best guesstimate of the real price: a buck. The best of an announced price: between $50 and $100 million,” he wrote in an e-mail message. The devil will be in the details of the obligations that a buyer would assume, he said, adding that “a buck essentially represents a gentleman’s agreement: I take a liability, headache and a distraction off your hands.”
He said that the Times Company could hang on to some pension liabilities or other obligations in exchange for a higher purchase price, a number that would give the appearance that it was getting something for the more than $1 billion it paid 16 years ago. He added that no bank would be interested in financing a deal given how other deals have blown up, so “the owner’s own money is immediately at risk.”

BizTimes.com: Journal Sentinel faces daunting choices“There’s no strategy – this is panic. What we’re likely to see this year (around the country) and what we’ll see in Milwaukee too is (publishers asking) how much they need to cut back and how much they can do to still hold their place in the market. For publishers, it’s about ‘How do we stay alive and stay profitable until we can get to some sort of breathing period?’ (Economic) recovery will not bring back their old business, but it will give them some breathing room.”

AP: Threat to shut Boston Globe shows no paper is safThe threat to close the paper "sends a very clear message to all employees and unions of surviving newspapers — that this is not business as usual. This is uncharted territory....Newspapers all "have a sword over their heads," said Doctor. If the industry wants to survive, he said, "everyone has to give some blood."

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Posts from February 2010

February 23, 2010

Attributor's "Fair Share Consortium" got a fair amount of pub (Attributor's "Fair Share Consortium Completes Newspaper Trifecta") last year with a blindingly simple idea: monetize illegal
use of copyrighted news content. That's otherwise known as anti-piracy
as business development, one of favorite web jujitsu strategies.

Rather than huff and puff about taking down unauthorized usage,
threatening uncertain court action, just make money on it. The notion:
go to the ad servers providing the ads against the unauthorized
content, and get them to share a piece of any ad money with original
publishers, taking it from the distributor's share. That was last year,
and little progress has been made on that point. Two reasons, at least.
First and foremost, Google and Yahoo -- the two major ad servers here
-- haven't embraced the notion. Sure, they say, we want to help out
those beleaguered publishers, but, hey, it's complicated, so let's take
another meeting, and another, and another. Secondly, for publishers,
"anti-piracy" isn't the first thing on their to-do lists; avoiding (or
emerging from) bankruptcy is. Further, they've cut back staff, so even
if they signed on with Attributor as many did, their use of the
Attributor system has been haphazard.

So the Redwood City-based start-up is trying a different approach. They've dubbed their new service "FairShare Guardian."
In the next 90 days, they'll be in their trial phase of it. What's the
same: Attributor will still monitor editorial content use, comparing
publishers' content to its usage on the web, determining and reporting
what's licensed and what's not. Now, though, publishers can "outsource"
(for a monthly subscription fee, based on how much content Attributor
is monitoring) to Attributor the follow-through. If Attributor finds
illegal use -- and that's not "fair use" by a longshot, meaning at least 80% of an article is used without authorization
-- it will pursue the matter. First, one notice letter to the offending
website, then, a second, and then, notice to both the ad servers
serving ads onto those pages hosting the content and search engines
pointing to it. It's a roundabout way of saying: pay up.

Google and Yahoo routinely get such notices under the DMCA,
and word is they respond well. Here's the 90-day question to watch: If
Attributor's numbers are close to right, pointing to "112,000
near-exact copies of unlicensed articles by more than 75,000 unlicensed
sites" in a recent 30-day period, how will Google and Yahoo respond to
a flood of thousands of notices? Google will only say it responds to
DMCA notices, but won't say how many it processes regularly.

It's essential to see this new initiative in a broader context: most
news publishers are trying to re-gain mastery of their content, digital
mastery. They had total control of it in the print world, being among
the most vertically integrated industries, from in-house reporting and
ad selling to printing and delivery. On the web, though, they early
cast their content out there, hoping to increase the catch of
advertisers and readers. As their sophistication about the digital
ecosystem has evolved, they are trying to regain mastery. You can see
them applying some basic journalistic principles - 4 Ws and an H --
here. About their content, they want to know: who is using, where
they're using, when they're using, why (a tougher question) they're
using and how they're using. Answering those questions means better
content management systems and better tagging and tracking systems.

Attributor is part of that puzzle, aimed at monetizing only
the most egregious taking of intellectual property -- whole or nearly
whole stories or posts.

More broadly, we can see the AP Registry initiative and the
Europe-based ACAP project aimed at the same mastery goals. We can see
the same principle in how Hearst is using Nstein.
In New York, Dow Jones President Todd Larsen recently told me the
company would continue to expand its use of the Eidos content
management system across content groups, with the same notion in mind.
Finally, the New York Times announced it has partnered with Denver-based Thought Equity Motion to gain some sense of mastery over its burgeoning video.

Mastery doesn't mean locking up the content for most of these
companies, though some blogosphere reaction to any Attributor or
Registry plans would lead you to believe otherwise. Knowing more about
your content, and its usage, is a tool -- a vital one -- as these
companies try to take a nuanced view of how to play in the next stages
of the web, especially the potential of the mobile, tablet-enabled web.
“We are not trying to take ourselves out of the digital ecosystem," NYT
Publisher Arthur Sulzberger took pains to point out at the paidContent2010 conference.

What the Attributor system does offer publishers is one look into
content usage. A few more than a dozen publishers, including Reuters,
are signed on for the 90-day trial, Attributor CEO Jim Pitkow told me.
If the 90-day trial works -- let's see how Google and Yahoo respond --
the idea could expand from there.

February 17, 2010

Patch, AOL's new push to provide local news is expanding -- rapidly, according to a memo that Silicon Alley Insider's Nicholas Carlson says he got from inside the reborn content-is-king AOL. Among the revelations:

Patch will move beyond its 30 or so local sites to hundreds. From its roots in contentiously hyperlocal Maplewood, New Jersey and other communities in New Jersey and Connecticut, it is planning on hundreds of Patch local news sites by the end of this year.

The goal: "To be leaders in one of the most promising 'white spaces' on the Internet."

There you have it, newsies. Local -- not long ago the domain of newspaper, TV and radio behemoths so dominant that barriers to entry made competition seem unthinkable -- is now open territory, a vacuum to be filled by a combination of youthful journalistic energy and state-of-the-art technology.

In hyperlocal, where others see too much cost and too little revenue, AOL believes that Patch can be a real business. Take a look at Patch, and you see lots of meat-and-potatoes coverage, on a par with community weeklies, though not much advertising.

Read through the comments on the short Business Insider post and you pretty much see the usual arguments -- some well-made, others less so -- trotted out about these new forays (Examiner, Demand) into content-farmed "journalism".

We see the complaints of writers about difficulty being paid, even for pieces accepted; a reminder of fast and far we're moving from arguments about Guild business rules in daily newsrooms to basic labor practices of, well, getting paid for the work you do, even if it is a pittance. We see debates on the quality of the work. And, of course, on how much of a business model is there, given a decade of failed efforts to tap revenue from local user-gen.

I come away believing there are three points for us to remember as this new phase of testing web content creation models goes forward:

It's not young vs. old (or experienced). Among the raging comments are those about the relative youth of the Patch staff. Let's not blame young people for trying to get into, and make, a new business. They're playing the hand they're dealt. Mixing valuable experience with youthful, trained passion should be a plus, witness the UC Berkeley Graduate School of Journalism's push with MissionLocal and now with the Bay Area News Project, for instance.

It's not about editors or technology. AOL, Demand, Examiner and others are smart to use technology to fundamentally know what readers and advertisers want and use that data to guide decision-making. For those of us who care about journalism, it's not a question of using such data or not, it's how we use the data. Data-driven journalism isn't journalism; the element of judgment and public service must always be part of the equation. As non-journalism companies increasingly create more content, their practices deserve lots of scrutiny. Similarly, traditional editors and reporters can't bury their heads in the sand; it's not 1990 anymore.

It's not about news or features. It's easy to decry all the "feature stuff" new sites and companies are creating, saying it's not news. Newspapers, though, have always been a compendium of news and features. Let the features -- family life, personal finance, health, sports and hobbies -- go and the related ad revenue (those topics are what people spend money on, not on City Hall) goes with them.

So that's the throw-down challenge in a nutshell: After being called "white space," respond with what you can do best, learning from the competition, and beating it to the punch.

For more on the fast-evolving world of digital news, check out my new site: Newsonomics.com

February 03, 2010

For more on the fast-evolving world of digital news, check out my new site: Newsonomics.com

As if the New York Times' Arthur Sulzberger and Janet Robinson didn't have enough headaches, trying to figure out how to fend off that other daily beast known as the Wall Street Journal.

Until December, 2007, when Rupert Murdoch pulled off the coup of his lifetime, cajoling, wheedling and finally hard-lining just enough of the Bancroft family into selling the prize Journal to him, the Journal had been a national business daily -- not the Times' direct competition. As the ink barely dried on the purchase agreement, Murdoch made plainer his disdain for the Times, its product, ownership and political leanings. He's also made increasingly clear -- as much in product change as in words -- his plans to drive the Times into the ground.

Now, as 2010 dawns, he's got a new weapon to use in the battle, and it has nothing to do with newsprint. It's Avatar, the stupendous, box-office-busting sensation, produced and distributed by Wall Street Journal's cousin, News Corp's Twentieth Century Fox. Avatar is smashing revenue records, going past the third dimension, pulling in more $2 billion or more so
far. That's compared to about $500 million in production and marketing
costs. News Corp's big and smart bet will be paid off magnificently.

Consider: $1.5 billion or more in profit from one News Corp movie alone. That compares to Times' total revenue of less than $2.5 billion in 2009, and probably a small operating loss (the company reports its full 2009 on Feb. 10.)

Sure, the Journal itself has seen its own P and L struggles, along with the rest of the industry, though its last-quarter results turned positive, contributing to a $259 million profit for News Corp's news and information division. Yes, it's better positioned -- business-oriented national newspaper, online subscription revenue stream -- than most dailies, but it's struggling for advertising along with everyone else.

If you're Rupert Murdoch though, you just have to say, "Take some of that blue people money and invest it in the Journal. Remember I said I wanted to kill the Times." Maybe send them flying into the infinity of the flux vortex.

So, as the Times reorganizes its digital business operations, add something new to the Times woes' of downsized ad spend, too great a cost structure and little way to gain other than ad revenues digitally until at least 2011, given its go-slower approach to metering. Add the forest people, the Navi. Yes, the blue people, too, are on Arthur's back.

As Michael Wolff laid out in his Murdoch bio, "The Man Who Owned the News," Murdoch may run a global, entertainment-news conglomerate, but he's a newspaperman in his blood. Yes, top execs at far-flung News Corp ops and his own children understand that newspapers are the company's past -- in terms of revenues and growth -- but that makes little difference as long as Rupert is in charge. It also will make little difference as long as profits flow like a golden river.

How much sense does it make to pull money from high-margin areas of News Corp to subsidize another? Call it transfer tithing, call it intra-corporate welfare, but expect to happen as necessary, Take just 10% of $1.5 billion, and you've got quite a war chest.

The Times' dilemma is not one that is unshared by other news media. In my new book, Newsonomics, I outline what I call the Digital Dozen. These are the world's largest news companies from ABC to the Washington Post. All are fighting to reach the potential, English-speaking audience of almost a billion. Each can find huge reach, at low cost, given cheap Internet distribution. All, though, face the equally huge challenge of managing and reducing high cost structures in the shorter term.

Consequently, those Digital Dozen news companies that are part of larger companies derive lots of revenue from non-news operations -- and they have a great shorter-term advantage. Think News Corp, which relies on its three-continent news operations for only about 20% of its revenues. Think Thomson Reuters, which depends on news for less than 10% of its income. Think Bloomberg, whose 280,000 licensed terminals drive the business, as it experiments with Business Week, TV and radio. As Andy Lack, Bloomberg's CEO of multimedia, put it picturesquely last week at the Software Information Industry Association conference
in New York City, "The reporters are a value-added service for the
data. If you're a journalist, being associated with an enterprise that
has that structure is a beautiful thing."

For the standalone news companies -- think New York Times, NPR, the Telegraph, AP in some ways -- it's a tougher slog. They have little cushion, little safety net. Maybe standalone news companies are obsolescent, profit or non-profit, or maybe the many efforts at diversifying business models will work to provide them cushions of a different sort.

Yet, today, beware the new blue man group that's on the offensive, simultaneously buoying the Journal and trying to sink the Times.

"Newsonomics: Twelve New Trends That Will Shape the News You Get" (St. Martin's) is now up on Amazon. It's my step-back take -- in 12 digestible laws -- on the print-to-digital transformation we've in the midst of. Order now; order many. Available from Amazon
and all your favorite booksellers. If you'd like to see it on the Kindle, please use the "Tell the Publisher! I'd like to read this book on Kindle link, left nav, on the Newsonomics page".